Japan wants to introduce gambling tax

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Peter Brandt December 6, 2019

The Japanese government wants to introduce a source tax. As a result, foreign players should pay taxes on gaming profits directly in Japan. This idea also shows that the Japanese gambling faces larger upheavals. However, the idea for the introduction of a withholding tax is no coincidence, because it should be realized in parallel to the opening of the first Japanese casino resorts.

In Japanese casinos, foreign players could soon be obliged to pay taxes on their profits on site. ((©Drew Rae/Pexels.com)

Japan expects horrendous income from gambling resorts

Gambling in Asia is a relatively delicate matter. Because unlike, for example, in Europe or the United States, where the markets are gradually liberalizing, gambling is still considered frowned upon in many places and is rarely tolerated culturally. Secretly, if you take a closer look, a different, more open -minded picture is revealed.

The alone Gambling stronghold in the Chinese special administrative zone Macau, which now generates significantly more sales than the US Las Vegas, symbolically stands for the attraction that gambling and casinos have many Asians. In Japan, too, the gambling sector is facing a revolution.

We had from the numerous plans to the record-breaking casino projects in Japan Already reported elsewhere. Which increasingly more liberal attitude of the Japanese governmentIn terms of casino and gambling in your own country, it only has to do something with a cultural revolution to a limited extent. Rather, financial incentives play a not completely insignificant role.

Because of course The huge and exclusive casino resorts, which are to be created in Japan in many places in the next five to ten years, also interesting for tourists or players from abroad. Therefore, the Japanese government intends to introduce a source tax.

If necessary, casino visitors from abroad would then be obliged to have one To pay tax on your profitsthat would then flow into the Japanese financial budget on site. In view of the size and expected number of visitors to the Japanese casino resorts, the withholding tax would result in annual tax revenue in multi-digit millions.

Taxes on gaming gains in USA?“With the proposal of a gaming tax, Japan would be among the few countries in the world in which foreign players would be obliged to pay for a tax payment. Incidentally, this tax also exists in the USA. In USA, on the other hand, profits that were achieved in casinos or lotteries are fundamentally exempt from tax. However, an exemption applies to professional gambling. Poker players, for example, whose main revenue is achieved through the card game, have to pay income tax on gambling income to the tax authorities. In addition, may no more than 10,000 $ in cash are led across the border, without reporting this to customs. This sum can be reached quickly with gambling profits. ”

Would Japanese players also affect gambling tax?

With the Withholding tax But if it has not yet been, one believes the Japan Times report, which recently reported on the tax project of the Japanese government for the first time. According to the report, there are currently also discussion among responsible politicians as to whether local players should not be obliged to pay for a tax tax.

This tax could be on the current Tax system of Japanese horse bets orientate. Currently, Japanese are obliged to pay a tax on horse races if they win their bets. However, the amount of the horse betting tax can vary and is calculated based on betting operation and competition.

This system could be transferred relatively simply to the planned casino resorts in Japan. For example, the exclusive casino strongholds could all Register chip purchases from players, as well as the payments made in the casino. Based on these numerical values, a tax amount to be paid, similar to horse races, could then be due.

It is far from clear whether there will actually be a gaming tax for Japanese visitors to the casino resorts. This However, the decision should be made by 2021 at the latest If, then the opening dates of the first casinos are also closer, although there are already initial delays that are related to location problems.

“Since the integrated resort locations have not yet been selected and the selection process of the operator for the company at the individual locations must also follow, it is unlikely that one of the systems can be opened up to Expo 2025.”

Ultimately, however, it will also be discussed by how attractive the gambling facilities will end up if tax levies are actually due for profits. Given the Exorbitant investment costs However, the operators are likely to be very interested in making a visit to their casinos as financially attractive as possible for Japanese.

Japanese gambling commission with concerns

Not entirely irrelevant for the future of the Japanese casino resorts and also the decisions on tax legislation should also activity the new Japanese gambling supervisory authority be. The members of the Commission were recently appointed by the Japanese parliament and must have a flawless reputation. Already From January 2020, the Commission should be active. Overall, the Commission has three central tasks:

  • Monitoring of the awarding of happiness in Japan
  • Monitoring of (foreign) investor activities on the Japanese gaming market
  • Analysis of the effects of the liberalized gambling market in Japan on the population

In particular, the last task of the Japanese gambling commission could become a problem in the future-at least for investors and casino operators-because according to experts, the fears are currently relatively high that the “free” gambling in Japan have a negative impact on the country’s crime statistics could.

“You are concerned about organizing crime, money laundering and other criminal activities (…). [The authorities] will ensure that they do everything in their power to ensure that this is a positive thing for the economy and that it will only have minimal negative effects. ”Niall Sean Murray, Expert in the gambling industry

The fact is that the gambling commission in Japan is definitely managed by competent people. Above all, the very well -known one in Japan is 67-year-old lawyer Michio Kitamura, which, by the way, specializes in tax law.